Hot-off-the-press a year ago at the SAP Fkom in Barcelona (Field Kick-off Meeting), this year it was a case of trying to save what can be saved, because in Europe S/4 and HEC are flops.
The SAP community took note of the signs of our times, involuntarily and with much grinding of teeth: there is no getting around Hana!
A catastrophe is brewing because SAP is neglecting every duty of care in relation to the application users, IT decision makers and company management. While SAP partners, heads of CCC, basic administrators and IT staff are by now sufficiently in the picture about Hana, hardly any knowledge of Hana has so far penetrated into the subject-specialist departments and into the ranks of management.
As was clearly evident last year at SAP TechEd in Barcelona, many SAP decision-makers do not yet even know that what is needed as a basis for it is Linux. The lack of educational work by SAP on the matter of Hana absolutely explains the low level of take-up. Always just talking of real-time and of maximum-speed, as ex-SAP-CTO Vishal Sikka did, was counterproductive. Always just pulling new Hana ꞌworks of artꞌ out of the hat, as the SAP Board member for technology Bernd Leukert does, may be entertaining but is none the more convincing.
There is no true process of educating stakeholders about what S/4, Hana and HEC (Hana Enterprise Cloud) can do: what DSAG members need, to be able to weigh up options regarding use of S/4, is specific information about which functions the solution covers.
For 72 per cent of the DSAG members surveyed, this is their most important decision-making criterion: “The success of an ERP for customers is decided based on its functionality. That is the key for digitalisation projects”, DSAG Board Chairman Marco Lenck explained. “SAP is not yet making this information available to a sufficient degree.”
In the SAP paper of around 300 pages, entitled “Simplification List for SAP S/4 Hana, on-premise edition 1511” there is solely one specific notification: S/4 is not the legal successor of the Business Suite 7.
Accordingly, all future application-users will need to buy new licences for a change of release from S/7 (ECC 6.0) to S/4. Yet in Marco Lenckꞌs opinion it cannot be that, for several years and via the product-care fee, established SAP customers are financing the development of new ERP software and that, at the end, SAP demands licence fees for this. According to the DSAG, S/4 is a software that must be made available free of charge, within the framework of normal maintenance, as an upgrade.
Yet SAP has other plans!
Albeit a little cryptically, this catastrophe was already made known at the end of last year, when PAC analyst Frank Niemann wrote in a research note that around one-third of established SAP customers was planning to introduce S/4 in the coming years and that almost 40 per cent of these were daring to make a new start. They either wish to, or have to, completely set up their systems anew.
The plan is for there to be an S/4 pricelist before CeBIT. However, even this step will not resolve the paradox that, as a whole, the established customers rather perceive S/4 as a path to better SAP applications. Yet Frank Niemann’s research reveals that, among them, there is not an awareness of the possible innovation potential in moving towards new processes and business models.
Accordingly, the insight emerges that S/7 Hana, i.e. SAP Business Suite on Hana, is the better choice. Even Hasso Plattner declared, in a blog entry published at the end of last year, that at present nothing can match the functionality of S/7.
In addition, many organisations are concerning themselves with the optimisation of their existing SAP landscape, so that they have little space or budget left for being able to handle an introduction of S/4.
PAC analyst Niemann thereby recognises quite rightly: the resource-commitment and the costs involved in an S/4 project for the established customers are something that, in many instances, they cannot yet even quantify. The application-users must also acquire S/4 licences and, in some cases, new hardware also. Good arguments are needed to justify these investments, in the light of already-existing SAP landscapes in the companies and the ongoing costs incurred as a result.
Time is pressing on! 2025 is supposed to be when S/7 ends but all is not yet running smoothly with Hana of this edition reveals where Hana is slower than an ECC 6.0 system on Any-DB. What is to happen with the numerous partner add-ons? If they have to be transferred onto S/4, they ought to be tested in advance – yet this could also prove superfluous, because hardly anyone is willing to pay for indirect use (NetWeaver Foundation for 3rd Party).
What could present itself as a compromise is that S/7 on Any-DB (Oracle, SQL-Server, MaxDB and IBM DB2) remains maintenance-supported until 2030 and SoH – an S/7 on Hana – is taken care of until 2035.
With around 100 operative S/4 installations at present, the product classꞌs goal was missed by a big margin; the growth rates are small indeed. So it appears to be fully justified for Plattner to use his blog entry to voice clearly-evident concerns about his legacy.